Faisal Basri Answers Jokowi's Calculations Regarding Nickel Downstreaming to Profit RI

Faisal Basri Answers Jokowi's Calculations Regarding Nickel Downstreaming to Profit RI

Senior economist Faisal Basri answered President Joko Widodo's (Jokowi) statement regarding the calculations of downstream nickel benefiting Indonesia. Previously, Faisal Basri stated that nickel downstreaming would only benefit China. 

In his statement, Jokowi emphasized that Indonesia still benefits greatly from downstream minerals. He explained that for nickel alone, the calculation until now is that the export value of processed nickel products is far greater than the export value of raw nickel. 

According to Jokowi, nickel that is exported raw only costs Rp. 17 trillion a year, but nickel that has been processed into various products has an export value of Rp. 510 trillion. 

"If we do our calculations, yes, I take nickel as an example, when the raw material is exported raw, it is only Rp. 17 trillion a year, after entering downstream it becomes Rp. 510 trillion," said Jokowi at the Dukuh Atas LRT Station, Central Jakarta, Thursday (10/8 /2023) yesterday. 

Jokowi then revealed that the country profited by taking taxes from the downstream process of exported nickel products. Starting from VAT, corporate and employee income tax, mining royalties, export duties, to various PNBP. According to him, the tax collected is clearly higher if what is being exported is processed products, not raw goods. 

"Just imagine that we only take taxes, take taxes from Rp. 17 trillion and take taxes from Rp. 510 trillion, that's really big. Because from there, from downstream we will get VAT, corporate income tax, employee income tax, corporate income tax, royalties, export duties, PNBP, everything is there," said Jokowi. 

"Just try to calculate, taxes from Rp. 17 trillion equals Rp. 500 trillion, how big is it," he said. 

Faisal Basri's answer

In his personal blog, Faisal Basri answered all of Jokowi's calculations. The first point, Faisal Basri stated that Jokowi's calculation of the export value was inaccurate and the calculations were not clear. 

"The sources and calculations submitted by the President are not clear. The president wants to ensure that the nickel downstream policy is very profitable for Indonesia and it is not true that China enjoys most of the downstream policy," Faisal Basri explained on his personal blog faisalbasri.com, quoted Friday (11/8/2023). 

"Mr President, sorry if I say that you have repeatedly conveyed misleading facts," he said again. 

Furthermore, Faisal Basri revealed that in 2014 the export value of nickel ore with HS code 2604 was only IDR 1 trillion. This figure was obtained from exports worth US$ 85.913 million multiplied by the average rupiah exchange rate in the same year, namely Rp. 11.865 per US Dollar. 

He also disclosed that in 2022, the export value of iron and steel with HS code 72 which is claimed to be the result of downstreaming is US$27.8 billion. Based on the average rupiah exchange rate in 2022 of 14,876 per US Dollar, the export value of iron and steel is equivalent to IDR 413.9 trillion. 

From this explanation, Faisal Basri admitted that he agreed with Jokowi on one point, downstream did provide a fantastic increase in exports. From the data above, according to Faisal Basri, there is an increase in export value of up to 414 times. 

"Despite the difference in data between what the President conveyed and my calculations, it is true that the increase in exports from downstream products, which is 414 times, is truly fantastic," said Faisal Basri.